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Revenues grow for global recorded music industry

ELEANOR HALL: Now to that good news for the music industry. Recorded music sales are up for the first time since the late 1990s, with the industry finally working out how to make money online.

For more than a decade, the music industry has been blaming piracy for eroding its profits.

Now it its sales are worth around $16.5 billion a year, and as Will Ockenden reports, the growth is coming from online sales and streaming music services.

(Sound of music track ‘Call Me Maybe’ by Carly Rae Jepson)

WILL OCKENDEN: It's a fairy tale the music industry has long dreamed of.

After a decade of struggling against changing markets and the internet making music widely available for free, revenues have grown for the first time since 1999.

The growth's not by much, only 0.3 per cent, but leading the charge is the queen of bubble-gum pop, Carly Rae Jepsen. Her single was the global best seller last year, pushing 12.5 million sales.

Second best global selling single of 2012 was Gotye's ‘Somebody That I Used To Know’. Third was that YouTube sensation with the crazy dance.

(Sound of music track ‘Gangnam style’ by PSY)

The industry's growth is coming from online. Download sales have increased about 10 per cent, and subscription services like Spotify have grown more than 40 per cent last year.

DAN ROSEN: The growth is coming from online. There's still a massive physical business and in Australia here we're still over half of the revenue is coming from CDs.

WILL OCKENDEN: Globally, physical musical sales - things like CDs and records - still account for just under 60 per cent of the market, but it is falling.

Dan Rosen is the chief executive of ARIA, the Recording Industry Association, representing the music labels both big and small.

DAN ROSEN: I think there's been an enormous amount of work spent on innovation and new business models to make sure that we can embrace the digital environment and get people music in the formats that they want.

(Sound of music track ‘Kiss you’ by One Direction)

WILL OCKENDEN: The music industry is also working out that using the internet to engage with fans can also be quite lucrative. Look no further than boy band One Direction, which got two listings in the global top selling albums last year.

The band has millions of Twitter followers, and more than 20 million people either view its videos on YouTube or look at the band's website every day.

WILL OCKENDEN: But it's not all good news, despite the growth in sales, there's always the problem of piracy.

Dan Rosen is from ARIA.

DAN ROSEN: The tone of this report is very much positive around what's going on and the music industry has done an enormous amount to make it easier for people to do the right thing and you know we want to continue our work with governments and ISPs to make it a little harder for them to do the wrong thing.

WILL OCKENDEN: The music industry has long pushed for legislative restrictions on the way that music is accessed online.

It wants search engines like Google to stop displaying links to websites that may offer licensed music available for free, and instead show links to industry approved sources.

It's also lobbying various governments to make internet providers block websites that may infringe on copyright.

Luke Hopewell is the editor of Gizmodo.com.au.

LUKE HOPEWELL: I do think the music industry has the ear of government quite heavily in terms of what can and can't be blocked through lobbying services and things like that. But restricting the internet and blocking certain sites like we saw with the SOPA and PIPA bills last year really is a risk to the free and open internet.

The internet was created to, you know for a free and open exchange of information but that also includes information that some people might not want shared, like for example how to steal music. It should be common knowledge that you shouldn't steal music and there are ways to do it and listen to music that are a lot cheaper these days.

ELEANOR HALL: That's Luke Hopwell from Gizmodo, ending that report from Will Ockenden.